Why Pay for Representation?

WHY PAY FOR REPRESENTATION?
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What part does the Home Affordable Modification Program (HAMP)
play in helping Homeowners?

• Strategic Debt Resolutions, LLC is constantly evolving its' understanding of the changing and unpredictable economic climate. We offer our expertise, consistant facilitation and the sharpest tools / skills to negotiate the best Strategic Loan Modification, in all possible ways. We continually study the rules and barriers to achieving an optimum result, while mitigating the confusion and frustration inherent in dealing with the lenders directly.
  
• A Washington Post article wrote "that when the Homeowner modifies a loan without a substantial decline in their monthly payment, the default rate is very high".

• Lenders and loan servicers tend to be more attentive to a sophisticated firm negotiating on behalf of a Homeowner. It is important to understand that the lenders / servicers / investors represent their own self-interest when negotiating with the Homeowner. An experienced third party negotiator that is knowledgeable about the current regulatory environment and with the myriad of modification programs available, has the best chance to reach a favorable settlement.

• When a Homeowner approaches their lender (or vice versa) for a loan modification, they may be entering into a trial period agreement that will last from 3 - 6 months. This is a temporary contract with the lender and evaluates the borrower’s ability to maintain a modification agreement before offering a permanent solution. This has now become a two phase negotiation process that forestalls the Homeowner from reaching an optimum modification, even if it is available. During this trial period, all financials with fluxuations in the Homeowner's situation has to be carefully documented and re-presented (often repeatedly) to the lender in order to maintain long term relief.

• Currently, the percentage of permanent modifications offered to Homeowners is extremely low. A third party advocate has the knowledge and experience to manage the complexity of the prolonged negotiation process, which will increase the odds and decrease the stress of achieving a favorable result.
  
• Even when contracting with Strategic Debt Resolutions, LLC as your third party advocate, a trial period is offered in more and more cases. We are committed to the Homeowner throughout the trial period and maintain the case file until long-term clarity is realized, permenant loan modification terms or otherwise. If a change in the economic environment within your own situation or the situations within the bank occurs, we will guide and facilitate all possible options for financial relief. We will not abandon you nor the process of your advocacy.   

• The government has estimated that at least 7,000,000 to 9,000,000 homeowners will need financial relief in order to save their homes. The sheer volume has encumbered the lender / servicer’s ability to address each Homeowner in a timely, effective and/or satisfying manner.

• There are critical segments to a successful process that can easily disqualify a Homeowner from achieving a successful modification, let alone qualify for one:
  • Each Homeowner's existing mortgage note and term requires new underwriting on a case by case basis, so a Homeowner is in essence performing the job of a professional mortgage broker or loan originator in putting together the comprehensive and consistent data necessary to negotiate a trial period and subsequent long-term solution.
  • The financial analysis that goes into presenting each case is critical in demonstrating the fine line between enough hardship to qualify and the ability to maintain the monthly trial period payments so a permanent solution can even be considered. The verifiable financials presented will be important in qualifying and monitoring swings in income and can disqualify a modification candidate at any time.
  • The bank or servicer of the Mortgage has shown a consistent problem in getting paperwork from the Homeowner in a timely way. It is a well known problem in the industry that the bank or servicer "loses" paperwork all the time. This problem is conveniently hard to correct because there is not a way to track accountability on the bank / servicer's end, so many repeated requests have to be honored to resubmit in a timely way the same paperwork again and again. The bank / servicer has no obligation to tell you if any paperwork is outstanding and has been used consistantly as a reason for disqualification.

• Our firms have paid close attention to state guidelines for compliance as well as honor their primary adherence to federal and legal requirements as they emerge. The FTC will be creating new rules and regulations for the modification industry in June 2010, so Strategic Debt Resolutions, LLC will be keeping a close eye on the new federal guidelines.

• An experienced negotiater already knows how to work within the system and continuously evolves as the process changes. In many cases, the professional negotiator has established relationships with the lending institutions and loan servicers.
  
• It is in the Homeowners best interest to work with a professional with expertise because many of the lender or loan servicer's policies to be more attentive when communicating with the law firm because they know that they are more willing to go to court to protect client rights.
  
     
  Home Affordable Modification Program (HAMP)
  

• The Home Affordable Modification Program (HAMP) is used for the modification of private-label mortgages, Fannie Mae and Freddie Mac mortgages. The program was developed in March 2009 for the intention of keeping Americans in their homes by preventing avoidable foreclosures. 
  

• There are Financial Incentives and Actions to lower mortgage interest rates by supporting Fannie Mae and Freddie Mac and are designed to encourage lenders, servicers, investors to do loan modifications in order to help Homeowners facing hardship. It is important to understand that these are guidelines only and not federal laws.   

• The HAMP program does not include Homeowners who have Jumbo or Portfolio loans. They do not accept files for Investment Properties and Second Homes; they fall outside of President Obama’s Making Home Affordable program. Their sole focus is primary residences.     
  
• The Making Home Affordable Program does not allow for interest rates to be modified below 2.0% or include Homeowners whose unpaid principal balance exceeds $729,750 for one unit.

• The recommendation has been to put the Homeowner on a trial period for three or more months before  executing a permanent modification agreement that will lower your interest rate to fixed rate for only five years, and then will gradually adjust to the market rate cap that is determined on the day your loan was modified. 

• President Obama’s Making Home Affordable Program states that loans can be modified only once under the program.
  
• Historically, Homeowners that negotiate on their own behalf have a higher default rate of their modification. When negotiated by an experienced professional, the default rate drops to 20% or less. 

• Our negotiators and attorneys re-negotiate with the lender or servicer multiple times before accepting a result. We do not stop negotiating even if the initial modification proposal has been denied. We re-approach the lender / servicer with other programs we are aware of that may not be owned or guaranteed by Freddie Mae or Freddie Mac (Non-GSE) and work with investor specific programs. There are many modification programs our negotiators are aware of that the Homeowner is "in the dark" about, and unfortunately, this advantage on the lender / servicer / investor's part is leveraged against them.